Perseverance: a double-edged sword
Never give up! – Absolutely Everyone
Here’s a seemingly taboo subject for an entrepreneurial site: calling it quits, pulling the plug,calling it a day, turning off the lights. Call it whatever you want, it comes down to admitting to yourself that the project is a non-starter. For many entrepreneurs coming to accept this painful reality is a seeming impossibility.
Let’s face it, to succeed at entrepreneurship one must be slightly mad. By this I mean that entrepreneurs first create the hype which will persuade customers to buy their product and then over time they start believing it themselves. Or as one sarcastic associate likes to put it, “You need to drink your own cool-aid”, making a veiled reference to the Jonestown, Guyana tragedy when too much commitment turned out to be negative quality.
Let me tell you a short story which illustrates my point. Back in mid 2003 my telephone rang one morning. The caller was an aspiring entrepreneur with an elaborate robbery prevention system for small retail businesses who had been referred to me by a venture capitalist. Although the call was not scheduled, I decided to invest ten minutes of my time and offer what would hopefully be helpful advice. The caller was looking for money to launch his company but not making any progress. Listening to the caller tell his story, I was shocked to learn that he had been trying to get this project off the ground for eleven years. Over that period of time he had managed to raise a nominal sum of capital which had been quickly expended on patents in a number of countries which he had believed presented strong markets for his product. But the patents had been been granted 7 years earlier and basically no other progress had been made since then.
What made his situation far worse than the lack of progress was the toll it had taken on him personally. He had quit his job eleven years earlier to pursue his dream on a full-time basis. During those years his income had shrunk to a trickle and the resulting financial stresses had contributed to the destruction of his marriage.
For the very first time in my business career I felt a strong need to advise an aspiring entrepreneur to quit. So I started telling him, as gently as I could, that he needed to re-evaluate the project and perhaps put a time limit on how much longer he would put into capital raising. I suggested that he should think about putting a six month time limit on the venture, although my real feelings were that he needed to pack it in that very day. I explained that if nothing happened within that period he needed to switch his focus to something that could provide him with a livable income.
The ten minutes I had originally allocated for the call stretched into twenty as he rambled on about his invention, and I tried to get him to reconsider wasting anymore time on an invention which sounded too absurd for anyone to buy.
Finally, when I informed him that I had a meeting to attend, the caller decided to share one final insight about himself. The previous week he had had a chat with a wealthy acquaintance who had told him to “never give up” on his dream. His finally words to me were that that was precisely what he intended to do: never give up.
Should the caller have quit that day? I can’t say for sure. In all likelihood, the answer is yes, as his invention was a crazy one. But there is always the famous exception to the rule that makes one leery of giving a definitive answer in these situations. A perfect example is the inventor of what came to be the Xerox photocopier who, according to legend, had to spend fifteen years promoting his invention before it finally gained traction. However, as the saying goes, the plural of anecdote is not data. In other words, don’t confuse the exception with the rule.
There’s an old joke about dreamers who join multi-level marketing “opportunities” that goes something like this: Did you hear the one about the Amway distributor whose bride divorced him after a year because he never consummated the marriage? Apparently all he ever did was sit on the edge of the bed and talk about how great it was going to be someday when they finally did do it.
Make sure that you have a realistic time frame for achieving positive cash flow. If you’re not making any progress in terms of sales within the first three months, you should re-evaluate the opportunity and your strategy. Entrepreneurship is about making things happen (i.e., creating positive cash flow), not about boring friends and family with empty talk about your future business.
Know when to quit, if that’s the right thing to do.